By Lorenzo Squintani and Chris Knight
COVID-19 has dealt a heavy blow to many parts of the economy, but companies that rely on tourism or travel in particular are suffering. For many, financing backed by the European Investment Bank has been a lifeline.
“We believe that by 2021 things will improve, but we will have to work hard over the next few years and watch expenses closely,” says Rafael Ruiz, chief financial officer of the Barcelona Technical Centre, an engineering firm in Martorell, northwest of Barcelona, that has 148 employees and designs products for the automobile, aeronautics and railway sectors.
Ruiz’s company took out a €950 000 loan from the Institut Català de Finances, also called the ICF, the public Catalan bank for small businesses and entrepreneurs. “By receiving this loan, we have been able to keep paying salaries and cover other commitments, despite the drop in projects,” Ruiz says.
The Barcelona Technical Centre’s financial lifeline was made possible by a €250 million loan that the European Investment Bank signed with the ICF. The loan will help up to 48 000 people in retail, tourism, catering, culture and many other sectors pay bills and come up with new business plans. The EU bank and the ICF have been working closely to support thousands of small businesses in the region since 2008.
“We are on continuous alert for signs of recovery,” says Rafel Niubo, the general secretary of Eurofitness, a Barcelona company that manages and builds fitness and sports centres across Spain. Eurofitness has had a hard time during the pandemic and many gyms have closed.
Niubo is seeing some encouraging signs, but his goal now is just to keep the company going. Eurofitness, which has 327 employees, took out a €1 million ICF loan. With this assistance, it avoided salary cuts, redundancies or reduced customer service.
As many as 2 000 companies could qualify for loans from this European Investment Bank financing. Using the EU bank’s loan and investments from other public and private sources, the ICF plans to make up to €1 billion available to steer small businesses through the crisis.